Business has only two functions. Marketing and innovation

1. Business has only two functions. Marketing and innovation Peter. F. Drucker

2. New product • The profound impact on society, life… • To belie the resistance to change it takes a a very brave or very foolish company • Appreciation comes in hindsight.

3. “The document company”

4. This is not about copiers…

6. Xerox • Country of Origin: USA • Brainchild of : Chester Carlson • Invented category • Past… • Between 1939 – 1944, rejected by 20 companies like GE, Kodak, IBM • 1959 first plain paper copier. Named “ most successful product ever marketed in America” by fortune

7. xerox • Innovation • Xerox Palo Alto Research Centre(PARC) • Xerox document University, Virginia • Marketing • Brand Name • PR to turn first mover advantage to success • It’s a $ 20 billion empire • Eco friendly design and manufacturing saved Xerox $2 billion between 1991 - 2001

8. “Deep down you want a hoover”

9. Hoover • Country of Origin: USA • Brainchild of : Murray Spangler • Invented its category • Visible improvement • Past … • William hoover patented it in 1908. shifted from harnesses for horses and carts to suction sweepers to vacuum cleaners

10. Hoover • Innovation • Category • wind tunnel system • Marketing • Try before you buy. • USA ‘s no.1 Vacuum cleaner

11. “Don’t leave home without it”“Do more cards”

12. American Express • Country of Origin: USA • Invented category through foresight • Past • 1850 – Express Freight Company , active in American civil war; 1880 – physical cargo to finance fund transfer;

13. American Express • Innovation • 1891 – “travellers’ cheques pioneered • 1958 Am ex card – consumer liberation • Marketing • Exclusivity through charge card credit rating • Ultimate status symbol “ membership has its Privileges”; Richard Branson , brand ambassador • Exclusivity and status to inclusivity and convenience • Stupendous ability to evolve • World’s no. 1 travel agency, financial supermarket

14. “Ho shuru har din aise…”

16. Nescafe • Country of Origin: Switzerland • Brainchild of : Max Morgenthaler • Invent the category • Past • 7 years of intensive research on the behest of brazilian government.in the 30’s

17. Nescafe • Innovation • 1952 pure soluble coffee, ‘65 freeze dried coffee, ‘67 granules, ‘94 full aroma • Marketing • Popular and prestige continuum • 3,000 cups of nescafe being consumed every second • Staple drink of the US armed force during WW II.

18. “Intelligence at work”

20. Sony • Country of Origin: Japan • Brainchild of : Akio Morita & Masaru Ibika • Past… • Radio repair firm 1946, first brand 1950. First pdt rice cooker! • Continuous and radical innovation

21. Sony • Innovation • second name “pioneering spirit” • Transistor radio, transistor TV, 1st colour video recorder, walk man, sony playstation, now connectivity between computing & home entertainment. • Marketing • Synergy between hardware and content – CBS records, columbia pictures, Sony music, sony pictures etc • People buzz and support Slogan “products for people” • Distrust for mkt research • Walkman launched as soundabout in US, Stowaway in UK, Freestyle in Australia. • Sony playstation 2 dominates the game console mkt with 70% global sales

22. There from the start…

23. ADIDAS • Country of Origin: Germany • Brainchild of : Adolph Dassler • Past… • 1920. first show at olympics – 1928, Jesse Owens, Armin Hary, 1936 • Equipment manager of the world • Continuous innovation

24. Adidas • Innovation • Pdt innovation studs, spikes • Material innovation nylon shoes • Marketing Ideas • 3 stripes, david beckham, Tim Duncan • Sports brand to fashion brand • Shoes to sports wear • Sports performance line (70%), sports heritage line ( 25%), Sports Style line (5%). • Spotting future trends thru ABCD camps, Basketball skill workshop • PR,, sponsorship, endorsements, testing of new pdts • Second largest in the sportings good industry • 13% of group sales spent on marketing • 60 new foot wear designs each year

25. Play safe

27. Durex • Country of Origin: UK • Founded in 1915 as London Rubber Company • Past • Producing condoms since 1929 • First to provide lubricated condoms and also non latex condoms • Perceptual improvement

28. Durex • Innovation • Constant product improvement • DUrability, REliability, EXcellence • Knowledge and awareness platform for debate and discussion • Marketing • Brand name • Sexual health ambassador • Association with safety, sexual health, and responsibility • Social responsibility to the heart of the business • Distribution – supermarkets, bars, pharma chains. • Market leader in 40 countries • No. 1 brand in the world, accounting for 26% of the 4 Billion market.

29. “Engineered like no other car in the world…”

31. Mercedes Benz • Country of Origin: Germany • Brainchild of : Karl Benz, Gottlieb Daimler • Past… • 1885 G. Daimler- first land vehicle with internal combustion engine, 1886 karl benz first car . 70 miles apart , took 40 years to get together. • Continuous innovation

32. Mercedes Benz • Innovation • Electro hydraulic system, fuel injection, sensotronic brake control system, Electronic stability program • Marketing • Explicit focus engineering, intrinsic focus prestige • Now extending to penetrate the market- A, C class • Mercedes Logo – vision to provide small engines to travel on land, sea and air

33. So which new products succeed? • Those that offer clear cut relative advantage • Xerox • Compatible with existing Consumption patterns • Mercedes benz • Trialability • Hoover • Easy to see advantage – observability • Adidas • Simplicity of Usage • American express, nescafe • Novelty with a perceptual rationale • Sony, Durex

34. Most of the times they fail… • Inadequate planning Tanishq • Insufficient superiority or uniqueness cool cats -polar • Poor execution pepsi ruffles • Technical problems color safe, cibaca lime • Poor timing yoghurt, iced tea • distribution betamax technology

35. What is a new product? • New to the world xerox • New product lines LG • Addition to existing product line Pears • New improved version surf, lux • Repositioning livon- renue • Cost reduction Simputer

36. Consumers Perspective on newness • Discontinuous innovation • New function never performed ever before • Hoover, jaipur foot • Dynamically continuous Innovation • Similar consumption pattern • Travellers cheques, Reva, scotch brite • Continuous innovation • Product modification • Merc, toyota, Mr. clean

37. Organisational support to NPD • Goal definition • Budgeting • Idea screening, concept development, product development, test marketing, commercialisation • Organisational structure • Product managers • New product managers • New product teams • Cross functional new venture / project temas

38. Why new products? • Changing consumer demands mobiles allied insurance covers • New avenues for profits • Combating environmental threats hoover

39. NPD Process • Idea generation • Interaction with employees, customers, designers, secondary sources etc walkman - morita and ibuka • Creative techniques • Attribute listing and exchange, mind mapping and association, combining objects etc

40. NPD Process • Idea screening • Should be reasonable, compatible with organizational goals , appropriate for org. tgt mkt • P and G model; • Is there a real customer need for this product? • Does the org. have the techno ability to make the pdt? • Is the potential large enough to promise profitability? • Drop error or a go error

41. NPD Process • Concept and strategy developmentdrug delivery systm • Concept development thru pdt positioning • Thru competitive positioning • Concept testing- need, liking, willingness to buy frito lays and pepsi • Detailed concept • Rapid prototyping • Virtual reality • Conjoint analysis • Marketing Strategy • mkt share, STP, 4Ps, • Business Analysis • Cost vs profits. profit goals for 1-3-10 years, Breakeven analysis • Seasonality, price elasticity, • Demand estimation – substitution . End use methods

42. NPD Process • Product development • Customer attributes to Engineering attributes VOLVO • Real prototype development • Alpha testing melatonin, gilette, cars, durex, • Beta testing clinical trials, Dow liquid tire chain spray

43. NPD Process • Test marketing • Sales wave research • Consumption patterns • Simulated test mktg • Promotional effectiveness, trial rates • Controlled test mktg • Shelf space success, local advertising and consumer beh.

44. NPD Process • Commercialisation • When? • First, parallel, after the competition • Where? • How ? • For whom ? Transelectra’s Good night, allathrin based repellent Brand name Mother and child National TV promotion Dealer network Penetration thru cordless version Skim thru liquidator 50% mkt share of 100 cr. Mosquito repellant market

46. Product Introduction

47. Growth

48. Maturity

49. Decline

50. Consumer adoption Process Innovators • Venturesome • Dare, different, younger • Better educated • ~fin. stable Early adopters • Self confident, income • Well read, aware • High usage rate • Opinion leaders • influencers Early Majority • Solid, mid. Class consumers • Deliberate & cautious • Avg. socio status Late majority • Less edu, fin. Stable • Older , conservative • Reluctant to change Laggards • Lowest in socioeco. Status • Highly resistant to go against convention Hold outs